Unpaid carers ‘still £2,551 out of pocket’ per year despite Autumn Budget change | Personal Finance | Finance

Unpaid carers are still thousands of pounds out of pocket despite changes announced by Rachel Reeves in the Autumn Budget, new data shows.

People can only earn up to a certain amount of money per week to qualify for the Department for Work and Pensions (DWP) Carer’s Allowance benefit. The Chancellor has increased this weekly earnings threshold by £30, meaning people can now qualify for the benefit if earn up to £181 a week after tax.

While the move has been welcomed by campaigners, new research from Online Care Finder Lottie shows unpaid carers across the UK will still face an average shortfall of £212 per month, totalling £2,551 annually.

The average cost of care has increased by 8 percent in the last year – with UK care home fees averaging a total of £64,000 a year.

Meanwhile, the weekly Carer’s Allowance has fallen behind, increasing by just 6 percent in the same period.

Will Donnelly, co-founder and CEO of Online Care Finder Lottie, said: “The increase in the earnings threshold for Carer’s Allowance to £181 per week is a positive step, but it isn’t enough to address the financial and emotional burdens faced by unpaid carers.

“Many carers will still find themselves out of pocket by an average of £212 every month, as Carer’s Allowance itself has not kept pace with inflation or care sector demands.

“What’s more, carers providing fewer than 35 hours of care each week are still excluded from the financial benefits of the Carer’s Allowance, leaving many unsupported under these changes.”

Mr Donnelly added: “With over five million people juggling work and caregiving responsibilities, it’s clear we need more than just incremental improvements. There must be a full review of funding and accessibility to care to create a system that reduces financial and emotional stress for carers.”

Joanne, who is balancing a pressured job whilst also being an unpaid carer for her mother, who is living with AMD (Age-related Macular Disease), disclosed she’s set to have “no funds” when she’s due to retire due to caregiving costs.

Joanne said: “I am 50 years old originally from South Africa. I have lived in the UK since 1999 and work full-time in a high-pressure, demanding position, with two days in a London office.

“My mother moved over to the UK in October 2023 due to financial reasons; she has AMD (Age-related Macular Degeneration); therefore, her vision is impaired. I have been caring for her since this time on my own.

“The current cost of care for my mum is an average of £100 a week. However, caring costs, to my knowledge, are around £2,000 a week should she be in a care home. All of my mum’s care is funded from my own income and savings. Therefore, I am looking at having no funds when I am due to retire. I budget her care costs monthly.

“I have some support from Crossroads Carers. They visit for a few hours once a week. This is currently under review as the 10 weeks of free care they previously provided have expired.”

Joanne said further enquiries have been made with the council, however, they are still “pending”.

Meanwhile, Simon, an unpaid carer juggling care for his elderly parents whilst battling his own health concerns, shared the emotional and financial impact he’s experiencing of being an unpaid carer.

He explained: “Being a caregiver for my dad, who is diabetic, requires meticulous meal planning to prevent diabetic hypoglycaemia episodes. His reliance on my help has affected me deeply, knowing that without my support, managing his meals effectively would be a challenge.

“This responsibility leads to additional out-of-pocket expenses, especially while purchasing food items. Even though I stick to the shopping list my parents provide, I feel compelled to go beyond and buy supplementary items.

“I conceal the actual cost of groceries from them, stating that I had enough money to cover it, often sacrificing my needs to ensure they have enough.”

He added that the strain on unpaid carers extends beyond the financial realm, causing heightened stress levels “that often lead to burnout, accompanied by feelings of helplessness and exhaustion”.

Sara Chapin, head of finance at Lottie, emphasised the “crucial lifeline” that Carer’s Allowance provides for unpaid carers but said it must increase in line with inflation to be effective.

Ms Chapin said: “For Carer’s allowance to be truly effective, it must adapt to inflation and reflect the actual costs of caregiving. Without substantial and responsive support, unpaid carers will continue to struggle financially while balancing their needs with those of their loved ones, highlighting the urgent need for ongoing commitment to meaningful assistance.”

Sparked by the complexities and challenges families face when navigating elderly care, Lottie’s online care finder platform aims to simplify the search for care by empowering care seekers across the UK.

Families can use the platform to compare care options and information about costs and services for car homes, home care providers, and retirement communities.

Since launching in July 2021, Lottie has helped hundreds of thousands of families find the best care solution for their loved ones.